What’s My Domicile?

Understanding Your Domicile for Estate Planning Purposes

As our society becomes more mobile and flexible, it is not uncommon for individuals to work in one state while maintaining a home in another or to own property or businesses in different states. However, for estate planning purposes, determining your domicile or primary residence is crucial since it determines which state’s laws must be followed when creating and executing estate planning documents and determining their validity. Additionally, when someone passes away, their domicile generally determines the applicable state inheritance or estate taxes, the rights of the surviving spouse, and how the estate must be administered.

Defining Domicile

Under common law, an individual always has one domicile, which continues to be the same place until they form the intent to make some other place their home while being physically present in that new location. In California, the term “residence” is synonymous with domicile and is defined in Government Code section 244. Under Government Code section 244, the following rules are observed when determining residency:

• It is the place where one remains when not called elsewhere for labor or other special or temporary purposes, and to which they return in seasons of repose.
• There can only be one residence.
• A residence cannot be lost until another is gained.
• The residence of an unmarried minor child is the same as that of the parent with whom they maintain their place of abode.
• The residence of an unmarried minor who has a living parent cannot be changed by their own act.
• The residence can be changed only by the union of act and intent.
• A married person may maintain their legal residence in California regardless of their spouse’s legal residence or domicile.

Changing Your Domicile

When you have ties to more than one state, there may be an opportunity to select the domicile that works best for you. To establish a new domicile, some actions to prove your intentions include registering to vote, obtaining a driver’s license and registering your vehicle, opening local bank accounts, informing insurance and financial companies, as well as government agencies such as the Social Security Administration of a change of address, filing state income tax returns, and reciting the domicile in estate plan documents. However, before making any changes, it’s important to seek advice from a CPA or tax attorney to evaluate the potential tax consequences. It is also essential to be aware that some state laws can apply based only on physical presence in the state, regardless of the intent to change your domicile, such as vehicle registration requirements in California.

Things to Keep in Mind When Determining Your Domicile:

• Your intent to establish a new domicile must be genuine and in good faith.
• You must not have any intention of returning to your former domicile.
• It is important to follow the statutory rules to determine your place of residence in your state of domicile.
• Some state laws can apply based on physical presence, regardless of intent.
• Stay informed of the tax consequences of establishing domicile in a particular state.

Contact Us for Estate Planning Assistance

At Naimish & Lewis, APC, our estate planning team can provide valuable advice on estate planning, trusts, and estates administration, and probate-related matters, such as probate administration, conservatorship, and guardianship. We believe that each individual estate planning situation requires an independent analysis of the specific facts and circumstances involved. To schedule an initial consultation with an attorney at our firm, please contact us.